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ASIAN DEVELOPMENT BANKADB
or the Asian Development Bank is an international financial institute operating since 1966.ADB provides financial assistance to its member nations for poverty reduction and improvement inthe quality of life. To finance its projects, ADB issues bonds and also leverages the contributionsmade by participant countries.The organization was started with the following objectives:The social and economic development of the Asian and Pacific countries.
To boost cooperative and simultaneous regional growth among member countries.
As of early 2007, ADB had 67 members, with 48 regional and 19 non-Asian members. Since Japanhas been the largest shareholder, the bank has always been governed by a Japanese President.ADB is headquartered at Metro Manila, Philippines.CURRENT PRESIDENT IS HARUHIKO KURODA
How ADB Works
The main functions of ADB are:
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Technical assistance provided to members, so that they can plan and execute developmentstrategies and projects.
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Assistance to DMCs (Developing Member Countries) to coordinate policies designed fordevelopment.
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Equity investments and loans to member nations.
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Encouragement to member nations to invest private and public capital for development.
Achievements of the Asian DevelopmentBank
Asian and Pacific countries have shown considerable transformation in terms of modernization. Tillthe end of 2007, 1,106 projects funded by ADB were evaluated. Out of these, 65% were rated assuccessful and 27% partly successful. Some of the highlights of the Asian Development Bank are:
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Funding projects led by the Utah State University to bring labor skills to Thailand.
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ROC Ping Hu Offshore Oil and Gas Development.
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Technical assistance grant of US$2 million to Bangladesh to overcome the challenges linkedto climate change.
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Trans-Afghanistan Gas Pipeline Feasibility Assessment.
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Greater Mekong Subregional Program
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Loan of $1.2 billion to bail Pakistan out of an impending economic crisis.
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Contributions towards the development of solar energy in India.
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Strategic Private Sector Partnerships for Urban Poverty Reduction in the Philippines.
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Earthquake and Tsunami Emergency Support Project in Indonesia.
 
Asian Development Bank: Challenges
Poverty is still one of the main challenges faced by ADB. The 2009 global recession has severelyimpacted ADB’s poverty alleviation goals. The following situations pose major challenges for ADB:
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Safe water is still not available to 60% of the people in the member countries.
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Improved sanitation facilities have still not reached 70% of the people.
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Out of every 100 children, 40 die before they reach the age of 15. Infant mortality rate isvery high.
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Half of the undernourished population of the world lives in Asia.
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Rising inflation has adversely impacted growth rates in Asia.STRUCTURE OF ADBADB’S top decision making body is its Board Of Governors. Governors are the minister-levelgovernment officials of each member country. The board meets infrequently and its duties includepassing resolutions approving countries memberships, elections of presidents and amendments of bank’s by-laws; it has no direct involvement woth day to day activities of ADB.The ADB”S top level decision making body is the board of directors, which, based in manilla,consists of senior level government officials appointed by their governments. There are 12 directors,representing either individual countries or groups of countries. The Board Of Directors normallymeet twice a week and approves ADB and grants. The decisions of the board are based on a systemof ‘weighted voting’ that reflects the % of each member countries share of ‘subscribed capital’ in thebank. The top shareholders of ADB are Japan and USA, China, Australia, Indonesia, Canada, Korea.Countries like Vietnam, Thailand, Cambodia all have small percentage of share in the bank
The Asian Development Bank (ADB) is a multilateral development financeinstitution based in Manila, Philippines. Founded in 1966, the ADB has 44 Asianmembers, as well as 17 non-Asian members. The ADB makes both market rate andconcessional loans, mostly to its 40 so-called developing member countries (DMCs).In the late 1990s, the Bank proclaimed poverty reduction as the key focus of the ADB,reflecting a significant shift in ADB lending from an early preference towards economicinfrastructure projects.The United States is a founding member of the ADB and Congress periodicallyauthorizes and appropriates funds for both the ADB and Asian Development Fund(ADF) through the annual Foreign Operations appropriations bill. Though some U.S.observers believe that the ADB is becoming redundant, mirroring the World Bank’slending activities, others believe that the ADB is a necessary regional institution thatadvances U.S. interests. The Bush Administration has pressed for active U.S.involvement in the ADB as well as the other multilateral development banks (MDBs).
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This report will be updated as events require.
 
Background
The Asian Development Bank (ADB), founded in 1966 with headquarters in Manila,Philippines, is a multilateral development finance institution that extends loans, makesequity investments, and provides technical assistance to its developing member countries(DMCs). Of the ADB’s 61 members, 44 are located in Asia. Of the 44 Asian countries,40 are developing member countries.In 2002, the ADB lent $5.68 billion, an increase of 6.3% from 2001's lending of $5.3 billion. India, with $1.18 billion, or 20.9% of the total, was the largest borrower amongCRS-221 countries in 2002. Pakistan was next with US$1.14 billion, or 20.1%, followed by thePeople's Republic of China ($868 million, or 15.3%), Indonesia ($767 million, or 13.5%),and Vietnam ($315 million or 5.6%).The ADB is owned by its member countries through the purchase of shares. TheUnited States and Japan are the two largest shareholders of the Bank, each owning 15.9%of ADB shares. Regional Asian member countries own 45.8% of Bank shares, and Asiandonor countries own 19.7%. Non-regional member donors own 34.5%. Consequently, both the regional and Asian donor countries own a majority of the ADB. In addition toJapan, other prominent regional members are China, India, Australia, Indonesia, andKorea, each owning between 5% and 6% of ADB shares. Share ownership accounts for 80% of a country’s voting power at the ADB. The remaining 20% of votes is distributedequally among all members.
Table 1. Largest ADB Contributors
% of Shares % of Voting
United States 15.84% 13.00%Japan 15.84% 13.00%China 6.54% 6.00%India 6.42% 5.47%Australia 5.87% 5.03%Source: U.S. Treasury
Finally, the Asian Development Fund (ADF), the ADB’s concessional facility wascreated in 1972 to provide loans to Asia’s poorest countries. When the ADB was created,China was not a member, and India, a founding country, decided not to become a borrowing member of the ADB. India and China are therefore both ineligible for ADFloans. Of the $5.7 billion lent by the ADB in 2000, $1.6 billion or 28% was lent throughthe ADF. The ADF is funded through periodic replenishments. There have been sevenreplenishments since the ADF was created in 1972. While Japan is the largestcontributor to the ADF, largest total donor to the Bank, and traditionally appoints theADB’s president, it was agreed in 1972 that voting weights for ADF loans would be thesame as loans from the ADB ordinary capital. This has allowed the United States tomaintain its equal voting weight at the ADB with Japan even though the U.S. contributesless than Japan and is currently in arrears to the ADF.
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